Bun innovation has helped drive record sales for premium coffee house business The Nero Group in the first half of its financial year.
In the UK, Caffè Nero reported revenue of £185.4m for the first half of its financial year (June 2024-November 2024), representing an 11.4% increase. This accounted for more than half of the group’s sales which hit £310m, underpinned by an increase of 8.0% in like-for-like sales (13.6% overall).
Caffè Nero founder and group CEO Gerry Ford pointed to menu innovation as one of the drivers of its success, highlighting sweet bakery NPD as part of this.
“Our success is a reflection of the hard work and outstanding service from our store teams and the real momentum we’ve built through menu innovation. I was particularly encouraged by our Cinnamon Bun, which sold over quarter of a million units after its launch in Q2, and the famous Maritozzi Bun, which took the country by storm and sold close to half a million units in the first half of the year,” commented Ford.
The Maritozzi bun, described as the ‘star of Italian breakfasts’, was rolled out as part of the 2024 summer menu. Caffé Nero’s version of the Rome delicacy consists of soft sourdough brioche – made using a sourdough that is over 35 years old and proved for more than eight hours – infused with lemon and orange. It is then filled with a sweetened cream and finished with a dusting of icing sugar.
Growing channels
The Nero Group currently operates around 1,120 stores across 11 countries with 11,000 employees. The UK estate comprises 626 Caffe Nero outlets as well as Coffee #1, Harris & Hoole, and Aroma stores with 13 locations added during the latest financial period.
Further growth came from the acquisition of Nottingham-based coffee brand 200 Degrees and London-based FCB, which together added an additional 32 stores to the UK portfolio. The latter helped to bolster the group’s travel and transport business.
The UK business also experienced a ‘notable and encouraging’ increase in several new sales channels. The delivery business benefited from continuing partnerships with UberEats, Deliveroo and Just Eat, generating £8.2m of revenue – an 8% rise. Likewise, the packaged Coffee at Home business achieved growth of 20%, with the wholesale business seeing growth of 35%. The latter was assisted by continuing momentum from the brand’s retail partnerships with Morrisons, Amazon, Ocado, the Ambassador Theatre Group, and Waitrose.
A partnership with Waitrose also strengthened with the opening of five ‘best of both’ cafes (which offer Waitrose food and coffee specially roasted for Waitrose by The Nero Roasting Company), and the first Caffè Nero store in John Lewis White City, London.
Ford added that The Nero Group is well placed for a “strong full year despite significant financial costs and challenges which the business will have to overcome in the coming months”.
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